Publications

Investors - FEBRUARY 7, 2019

i3 investor survey: Insights into the “defensive” view of infrastructure

by Drew Campbell

Each year at IREI’s VIP Infrastructure conference and i3 Editorial Advisory Board meeting, we survey attendees with “quick tally” questions to gauge sentiment on pressing topics. This year, after our infrastructure events, we decided to extend the quick tally surveys beyond the events to check in on the perspectives of investors — such as pension plans, insurance companies and sovereign wealth funds — and gauge their perspectives throughout the year.

This is the second quick tally survey we have conducted, the first being in July 2018. In our second edition of the survey, we sent four questions to investors and received 21 responses.

Survey participants were 13 pension plans, six insurance companies, one superannuation fund and one permanent fund.

Geographically, the respondents were primarily from North America (13 from the United States and four from Canada). There was one participant each from Australia, Germany, Korea and Japan. The majority of responses came from U.S.-based defined benefit pension plans.

The questions we asked were: 1) Is infrastructure meant to be a defensive part of your overall portfolio?; 2) Have you increased your allocation and/or made new commitments to infrastructure during the past 1-2 years?; 3) Given global stock market activity since October, do you believe we’re entering a bear market in equities?; and 4) True or False: Interest rate policy during the past 10 years has created a disconnect between economic and market activity, and therefore the economy will not follow the equity markets down.

Investors (14) indicated a belief that infrastructure is a defensive asset class, and they have been increasing both commitments and target allocations (20) to these investments during the past two years. Most investors (12) also believe public equities will enter a bear market in the near future but a sizeable number of investors disagree (8). A large majority of respondents (16) believe the economy is not disconnected from the equity markets and it will follow the market’s ups and downs.

The full results will be available in the March issue of Institutional Investing in Infrastructure.

 

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